Social networking sites and other social media have opened new ways for people and businesses to communicate with each other, and they have become extremely popular. Businesses are increasingly using these channels to reach current and potential customers.
In addition, the Internet hosts millions of blogs and tens of thousands of podcasts. These sites and media create opportunities but also present risks together with potential benefits.
Risks of employee social media use
- Employees may make inaccurate statements, particularly when not all the facts of a developing situation are known.
- They may inadvertently release confidential information.
- They may post statements that embarrass the company, for example negative remarks about racial or ethnic groups.
- They may make statements that violate a person’s privacy.
- Disparaging statements can provoke legal claims such as libel.
- Blog posts that offer advice might expose the employer to lawsuits if others rely on that advice and suffer loss.
- Disgruntled customers, employees, or competitors might post disparaging comments about the company.
How insurance can fall short
- General Liability insurance may not pay for defending against or settling many claims arising from social media use.
- Typical exclusions include injuries caused by an employee when the employee knew the action would violate a person’s privacy.
- Policies often exclude injury caused when an employee knew a statement was false.
- Claims that a business’s products or services do not live up to statements about their quality are commonly excluded.
- Injury arising out of statements made on Internet chat rooms or bulletin boards the business owns or controls may be excluded.
- Unauthorized use of someone’s name or product in a misleading way is often not covered.
The insurance generally covers only certain non-bodily injuries and will not cover a lawsuit filed by someone who suffered financially after relying on advice on the company’s blog.
Reducing the chance of an uninsured loss
- Adopt written procedures for employee use of social media that define who may post on the company’s behalf.
- Define acceptable and unacceptable behavior for both company and personal accounts.
- Require that employees’ personal sites make clear they are not speaking on behalf of the company when appropriate.
- Set guidelines for when a public discussion should move offline and into the company’s regular workflow, such as handling a customer complaint privately.
The consequences of non-compliance.
Company policies should address employees’ ability to link to the company’s Website on their personal social media pages and should cover use of the company name, logo, or advertising on personal sites.
Companies that handle media records or content may also consider industry-specific coverage options such as Magnetic and Optical Recording Media Insurance to fill gaps left by General Liability coverage.
Nonprofit and community-focused organizations with active social outreach should evaluate risks and available protections such as Social organizations insurance.
Purchasing special insurance to fill in gaps left by General Liability coverage is another option to consider.
Social media offers new opportunities for businesses to build relationships with customers, but it requires care and proper planning. To review your options and coverage, consider talking to an agent.
Frequently Asked Questions
Can my business be sued for an employee’s social media post?
Yes. Employers can face lawsuits for defamatory or privacy-violating posts made by employees on behalf of the company or while acting within the scope of employment.
Will General Liability insurance cover social media claims?
Not always. Many General Liability policies exclude certain privacy, advertising, and intentional false-statement claims related to social media.
What steps reduce the risk of social media liability?
Clear written social media policies, training, and defined approval processes for company posts reduce risk and help manage incidents when they arise.
Should small businesses buy special insurance for online content?
Depending on exposure, businesses may benefit from specialized coverage that addresses reputational harm, privacy breaches, or media-related claims.